IT failure: A tale of three perspectives

IT failure — and the reasons for it — is not a subject customarily discussed outside company walls, and much information you glean on this issue is anecdotal.

The topic featured quite prominently, however, at the most recent CIO Exchange organized by IT World Canada and CIO Canada some weeks ago. The CIO Exchange is a facilitated community of senior IT executives from Report on Business’ Top 1,000 companies. Its members are responsible for overseeing technology needs, budgets, requirements and strategic direction for their organizations.

When talking about IT projects that didn’t quite make the grade, some participants shared horror stories about “vendor misrepresentation.” It’s becoming acceptable in the industry, they said, for vendors and suppliers to drastically overstate the capability of their product.

They traded experiences of how they were misled by salespersons about virtually everything — actual capabilities of the technology, its hidden costs, the complexity of the roll out, and the length and expense of end-user training. They said in some cases, by the time the real facts were discovered, the salespersons who booked the original order were not with the vendor anymore — and therefore beyond accountability.

One person shared how a vendor sold his company a product that did not deliver the gateway access it promised — and it almost put them out of business. Another related how he is now forced to put arbitration costs in the agreement with vendors, and withholds 20 per cent of the payment until the vendor delivers bug and trouble-free operations.

That’s one interesting perspective on why some IT projects fail.

In an interview with IT World Canada, Frank Koelsch provided another. Koelsch is executive vice-president of London, Ont.-based Info-Tech Research Group. He does not dispute that vendors sometimes misrepresent their product’s features and capabilities. However, he also does not believe that this is the sole or even the main reason for IT project failure. In fact, he says, at times placing the entire blame on the vendor may be “a bit of a cop out.”

The real reasons for IT failure are internal, Koelsch said, citing a recent Info-Tech report to prove the point. The report is based on a survey of 1,400 IT decision makers from mid-sized companies in the U.S., Canada and Britain.

Ninety-five per cent of those surveyed said their IT departments had experienced project failure. They cited unrealistic time frames, lack of required staff, and poorly defined project scope — as the main culprits.

Worthy of note is that factors traditionally associated with IT failure appear relatively low on the list. For instance, “too little budget” — that IT department’s pet peeve — ranked fifth while “misunderstanding the customer” ranked seven. The good news, according to Koelsch, it that the main issues (time, staff and scope) are really very addressable. “None of these problems occur when the project is already underway.”

So the antidote is clear: address these issues prior to rollout.

It’s clear from the Info-Tech study that project planning — or the lack thereof — is a key issue to be addressed, and one that encompasses many others. Unrealistic time frames, inadequate staff or resources, and all the other problems really stem from this one issue.

And, as the survey also reveals, one reason why projects are not properly planned or mapped out has a lot to do with inadequate or ineffective communication between the business and IT side of an enterprise.

For instance, study participants were asked questions like: are business and IT aligned in your company? Do IT decision-makers spend adequate time with business managers? Does IT drive competitive advantage in your firm? Is IT understood by your business executives?

“We got a neutral rating on these questions,” said Koelsch. “There wasn’t a high degree of either alignment or misalignment. Some of those surveyed really didn’t know if there was an alignment or not.” Koelsch argued that this “neutral” score is really a negative rating. “Every IT group should have a high alignment with business. That’s their raison d’etre: to support the business.”

That’s a position many in the vendor community agree with.

For instance, Oakville, Ont.-based Unis Lumin Inc. — an IT systems integrator — attributes much of its success to its emphasis on fostering IT-business alignment. “Our tag line says technology-based business solutions,” noted company president and CEO, John Breakey. “That’s the focus of all our work.”

He said before starting any project, Unis Lumin consultants encourage the customer — if the latter is amenable — to spend time upfront defining the business requirements and quantifying — or monetizing — the benefits. “We then map this to the technology [required] and the cost of that technology.”

He said the ideal payback period for a project is around 12-18 months “Anything over that is risky as the people originally involved in the project may no longer be around — and the objectives may get lost.”

In multi-site implementations, he said, a phased rollout makes sense, both from a business and an IT standpoint. “Oftentimes people try to take on too much and to accomplish a whole lot in one fell swoop. The better way, is to do a rollout in one site, work out the bugs, revise the scope of work, if necessary, and then roll it out to the rest of the locations.”

The advantage of this approach, Breakey says, is that you avoid propagating mistakes, and costs associated with that.

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